Silver Market Morning

April 10, 2014

Gold Today – The gold price closed at $1,311.10 up $2.30 on Wednesday, in New York. Asia lifted it to $1,319.50 ahead of London’s opening. The gold price was Fixed in London at $1,321.50 up $11.75. In the euro, it Fixed at €953.188 up €3.268 as the euro was weaker at $1.3864 down from $1.3788: €1. Ahead of the opening in New York gold stood at $1,321.00 and in the euro at €952.62.

Silver Today – The silver price closed at $19.88 down 13 cents on Wednesday’s close, in New York. Ahead of New York’s opening, it was trading higher at $20.23.

Gold _{(very short-term)}

We expect the gold price to consolidate with a positive bias, today in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate with a positive bias, today in New York.

Price Drivers

On Wednesday, we saw no sales or purchases to or from the holdings of the SPDR gold ETF or from or into the Gold Trust. Their respective holdings still stand at 806.483 tonnes and 164.41 tonnes. The pattern of New York pressing the gold price down and Asia lifting it continues. Asian demand has pushed the gold price through very short-term minor resistance and looks headed higher. It is clear that unless sales from these funds persists the U.S. price of gold will rise further.

In India, with elections underway the feeling that the restrictions on gold imports are about to be eased is growing. The hints coming out of government are that they will be eased on a graduated basis. But nothing is quite straight out of India, so we wait in anticipation. However, if the BJP party wins the elections, we may have to wait up to three months for such an easing. They have only promised to review these restrictions, not remove them.

The momentum of dollar weakness accelerated yesterday, as it fell against all currencies. Fed minutes confirmed that interest rate rises will not happen for a very long time yet. Against the euro it has fallen to $1.3846: €1 down almost half a cent on yesterday and more than a cent this week. This is contrary to the expectations of the European Central Bank. If the fall persists the implication will be that the E.C.B. has lost control over the exchange rate.

With Trade data out of China showing a surprising drop in both imports and exports evidence is growing that global growth may be declining. If this is correct it is happening after nearly seven years of efforts to turn the global economy back to a solid growth path. The structural damage done, by the 2007/8 ‘credit crunch’, needs a solid recovery to repair that damage still. If growth is failing, the monetary structure of the world is in no position to whether a new recession. We watch to see if economic clouds are darkening? [For more on this, subscribe to www.GoldForecaster.com and www.SilverForecaster.com and visit www.StockbridgeMgMt.com to hold gold out of reach of potential confiscation]